What Is a Guardianship?

The guardianship process is started by a petition being filed with the court. For a person to be deemed incapacitated by the court, the petitioner must provide medical evidence of the individual’s incapacity.

The Phoenix Reporter’s recent article entitled “What is a guardianship?” explains that to be found incapacitated, the court must determine that the individual’s ability to receive and evaluate information effectively, and to communicate decisions, is impaired to such a level that he or she is partially or totally unable to manage his financial resources or to meet the essential requirements for his physical health and safety.

After the petition is filed, the individual alleged to be incapacitated must be given written notice of the action and told of their right to counsel. A formal hearing is held, and the alleged incapacitated person has a right to be at the hearing and is typically required to be at the hearing (unless a physician excuses him or her because their welfare could be harmed by attending). During the hearing, evidence is presented to demonstrate that the person is incapacitated, that the guardianship is necessary and that there’s not a less restrictive alternative. The court will render a decision on whether the appointment of the guardian is necessary and, if appropriate, will adjudicate the individual an incapacitated person. The guardian is then empowered to make decisions regarding the incapacitated person’s care and financial management.

The court can decide to appoint a guardian of the person and/or a guardian of the estate. The guardian of the person makes decisions on where the individual will live, his or her safety and physical wellbeing, along with his or her daily health care. In contrast, the guardian of the estate manages the finances and property of the person.

Any qualified individual, corporate fiduciary, non-profit corporation, or county agency may serve as guardian. The guardian has ongoing oversight by the court and must file annual reports. However, when first appointed as the guardian of the estate, he or she must file an inventory of the incapacitated person’s assets.

A guardianship should be a last resort and only used where necessary and where there are no less restrictive alternatives. Most guardianships can be avoided with proper estate planning.

A guardianship is a more restrictive tool in dealing with incapacity than a power of attorney. A power of attorney gives you more flexibility, and there’s usually no involvement by the court. A durable power of attorney is one of the most important estate planning documents you can have and can prevent the need for a guardianship in the event of incapacity. Ask an experienced estate planning attorney or elder law attorney for assistance.

Reference: The Phoenix Reporter (Sep. 1, 2021) “What is a guardianship?”

I’ve Been Appointed My Aging Parents’ Power of Attorney but What Now?

A durable power of attorney is frequently signed by aging parents. However, sometimes the elderly can misunderstand exactly what that entails, especially when it comes to the authority of the person given decision-making powers.

The person appointed (called the agent or attorney-in-fact) is also typically an adult child. Nevertheless, he or she may be unaware of the appointment or does not grasp what is permitted and when it is permitted. It can be very confusing.

Forbes’s recent article entitled “Let’s Get Clear: What Does It Mean To Be Appointed Aging Parents’ Power Of Attorney?” provides the answers to three frequently asked questions of many heard from families.

Question: Can my father, who’s in charge of our family finances but now has dementia, revoke his DPOA that he signed years ago and name a child to take over managing his money when he needs help?

Answer: Perhaps. If Dad has dementia, he needs to be evaluated by a doctor to see if he still has the capacity to make financial decisions. This is a legal determination with help from doctors and particularly psychologists, who can perform the evaluation and give standardized test results. If the parent is found to have financial capacity, he is permitted to revoke the durable power of attorney at any time. However, if he doesn’t have mental capacity, he’s no longer legally capable of revoking the document.

Question: What if my mother is found to be incapacitated for financial decisions? If I’m the appointed agent on the DPOA, when can I use this authority?

Answer: Provided you’ve met any requirements detailed in the DPOA document itself, you can immediately take over financial authority. Some durable power of attorney documents require that a doctor or even two doctors must say the parent no longer has capacity before you can act. Some durable powers of attorney say the document is effective immediately. The agent’s authority is contained in the document.

Question: Am I allowed to keep my father from recklessly giving away money or making imprudent decisions with his wealth, if I’m the appointed agent on his DPOA?

Answer: Yes. Usually, the durable power of attorney gives the agent full authority over all financial matters.

Reference: Forbes (June 22, 2021) “Let’s Get Clear: What Does It Mean To Be Appointed Aging Parents’ Power Of Attorney?”

What’s a Living Will?

Living wills can be used to detail the type of healthcare you do or don’t want to receive in end-of-life situations or if you become permanently incapacitated or unconscious. A living will tells your healthcare providers and your family what type of care you prefer in these situations, explains Yahoo Finance’s recent article entitled “How to Make a Living Will.” These instructions may address topics, such as resuscitation, life support and pain management. If you don’t want to be on life support in a vegetative state, you can state that in your living will.

A living will can be part of an advance healthcare directive that also includes a healthcare power of attorney. This lets your chosen healthcare proxy make medical decisions on your behalf, when you’re unable. A living will typically only applies to situations where you’re close to death or you’re permanently incapacitated; an advance directive can cover temporary incapacitation.

Ask an experienced estate planning attorney or elder care lawyer about the technical aspects of how to make a living will. You should consider what to include. Every state is different, so your attorney will help you with the specifics. However,  you’ll generally need to leave instructions on the following:

  • Life-prolonging care, like blood transfusions, resuscitation, or use of a respirator;
  • Intravenous feeding if you are incapacitated and cannot feed yourself; and
  • Palliative care can be used to manage pain, if you decide to stop other treatments.

You will want to be as thorough and specific as possible with your wishes, so there is no confusion or stress for your family when or if the day arrives. You next want to communicate these wishes to your loved ones. You should also give copies of your living will to your doctor. If you’re drafting a living will as part of an advance healthcare directive, be certain that you get a copy to your healthcare proxy.

Review your living well regularly to make sure it’s still accurate because you may change your mind about the type of care you’d like to receive.

Ask your attorney to help you draft a living will along with a healthcare power of attorney, so all of the bases are covered as far as healthcare decision-making. When choosing a healthcare proxy, select a person on whom you can rely, to execute your wishes.

A living will can be an important component of an estate plan and preparing your family for your death.

Reference: Yahoo Finance (Feb. 18, 2021) “How to Make a Living Will”

Get Estate Plan in Order, If Spouse Is Dying from a Terminal Illness

Thousands of people are still dying from COVID-19 complications every day, and others are dealing with life-threatening illnesses like cancer, heart attack and stroke. If your spouse is ill, the pain is intensified by the anticipated loss of your life partner.

Wealth Advisor’s recent article entitled “Your Spouse Is Dying: 5 Ways To Get Your Estate In Order Now,” says that it’s frequently the attending physician who suggests that your spouse get his affairs in order.

Your spouse’s current prognosis and whether he or she’s at home or in a hospital will determine whether updates can be made to your estate plan. If it has been some time since the two of you last updated your estate plan, you should review the planning with your elder law attorney or estate planning attorney to be certain that you understand it and to see if there are any changes that can and should be made. There are five issues on which to focus your attention:

A Fiduciary Review. See who’s named in your estate planning documents to serve as executor and trustee of your spouse’s estate. They will have important roles after your spouse dies. Be sure you are comfortable with the selected fiduciaries, and they’re still a good fit. If your spouse has been sick, you’ve likely reviewed his or her health care proxy and power of attorney. If not, see who’s named in those documents as well.

An Asset Analysis. Determine the effect on your assets when your partner dies. Get an updated list of all your assets and see if there are assets that are held jointly which will automatically pass to you on your spouse’s death or if there are assets in your spouse’s name alone with no transfer on death beneficiary provided. See if any assets have been transferred to a trust. These answers will determine how easily you can access the assets after your spouse’s passing.

A Trust Assessment. Any assets that are currently in a trust or will pass into a trust at death will be controlled by the trust document. See who the beneficiaries are, how distributions are made and who will control the assets.

Probate Prep. If there’s property solely in your spouse’s name with no transfer on death beneficiary, those assets will pass according to his or her will. Review the will to make sure you understand it and whether probate will be needed to settle the estate.

Beneficiary Designation Check. Make certain that beneficiaries of your retirement accounts and life insurance policies are current.

If changes need to be made, an experienced elder law or estate planning attorney can counsel you on how to best do this.

Reference: Wealth Advisor (Jan. 26, 2021) “Your Spouse Is Dying: 5 Ways To Get Your Estate In Order Now”

How to Plan for Spouse’s Medicaid

Medicaid eligibility is based on income. This means that there are restrictions on the resources—both income and assets—that you can have when you apply.

The Times Herald’s recent article entitled “Medicaid planning for a spouse” says that one of the toughest requirements for Medicaid to grasp is the financial eligibility. These rules for the cost of long-term care are tricky, especially when the Medicaid applicant is married.

To be eligible for Medicaid for long-term care, an applicant generally cannot have more than $2,400 in countable assets in their name, if their gross monthly income is $2,382 (which is the 2021 income limit) or more. An applicant may have no more than $8,000 in countable assets, if their gross monthly income is less than $2,382 (2021 income limit).

However, federal law says that certain protections are designed to prevent a spouse from becoming impoverished when their spouse goes into a nursing home and applies for Medicaid. In 2021, the spouse of a Medicaid recipient living in a nursing home—known as “the community spouse”—can keep up to $126,420 (which is the maximum Community Spouse Resource Allowance “CSRA”) and a minimum of $26,076 (the minimum CSRA) without placing the Medicaid eligibility of the spouse who is receiving long-term care in jeopardy.

The calculation to determine the amount of the CSRA, the countable assets of both the community spouse and the spouse in the nursing home are totaled on the date of the nursing home admission. That is known as the “snapshot” date. The community spouse is entitled to retain 50% of the couple’s total countable assets up to a max. The rest must be “spent-down” to qualify for the program.

In addition to the CSRA, there are also federal rules concerning income for the spouse. In many states, the community spouse can keep all of his or her own income no matter how much it is. If the community spouse’s income is less than the amount set by the state as the minimum needed to live on (“the Minimum Monthly Maintenance Needs Allowance” or “MMMNA”), then some of the applicant spouse’s income can also be allocated to the community spouse to make up the difference (called “the Spousal Allowance”). These rules are pretty complex, so speak with an experienced elder law attorney.

Reference: The Times Herald (Jan. 8, 2021) “Medicaid planning for a spouse”

What Changes Have Been Made to Protect Senior Investors?

The Financial Industry Regulatory Authority or “FINRA,” is a private corporation that acts as a self-regulatory organization of investment brokers and investment firms.

Its rules and guidance are designed to protect investors and to “ensure the integrity of today’s rapidly evolving market.”

The new FINRA Sanction Guidelines now expressly contemplate “whether the customer is age 65 or older” and “whether the respondent exercised undue influence over the customer and whether the customer had a mental or physical impairment that renders the person unable to protect his or her own interests”.

The National Law Review’s recent article entitled “National Adjudicatory Council Revises FINRA Sanction Guidelines” reports that FINRA Regulatory Notice 20-37 states the revised Sanction Guidelines that became effective Oct. 20, 2020.

In the revised Sanction Guidelines, FINRA and the NAC now directly discuss the issue of potential senior investor abuse. They also have revised the Sanction Guidelines to be consistent with FINRA Rule 2165 – Financial Exploitation of Specified Adults.

Further, FINRA asserts that “as with other considerations in the Sanction Guidelines, adjudicators should take a principles-based approach to assessing if the rule violations have more impact on elderly or impaired customers, including the customer’s ability to recover from sustaining financial losses.”

Moreover, FINRA states that these revisions to the Sanction Guidelines should be considered by adjudicators as only “aggravating factors” when considering an appropriate sanction for a FINRA violation.

The FINRA Sanction Guidelines don’t state specific sanctions for a particular violation. They now provide adjudicators with an additional “aggravating factor” to contemplate in determining the appropriate sanction.

The watchdog said that it was feedback from its Securities Helpline for Seniors that showed a pattern of concerns among senior citizens about brokers exploiting their financial accounts that caused them to take action “by putting in place the first uniform, national standards to protect senior investors.”

Reference: The National Law Review (Nov. 2, 2020) “National Adjudicatory Council Revises FINRA Sanction Guidelines”

Is Transferring House to Children a Good Idea?

Transferring your house to your children while you’re alive may avoid probate. However, gifting a home also can mean a rather large and unnecessary tax bill. It also may place your house at risk, if your children get sued or file for bankruptcy.

You also could be making a mistake, if you hope it will help keep the house from being consumed by nursing home bills.

There are better ways to transfer a house to your children, as well as a little-known potential fix that may help even if the giver has since died, says Considerable’s recent article entitled “Should you transfer your house to your adult kids?”

If a parent signs a quitclaim to give her son the house and then dies, it can potentially mean a tax bill of thousands of dollars for the son.

Families who see this error in time can undo the damage, by gifting the house back to the parent.

People will also transfer a home to try to qualify for Medicaid, but any gifts or transfers made within five years of applying for Medicaid can result in a penalty period when seniors are disqualified from receiving benefits.

In addition, transferring your home to another person can expose you to their financial problems because their creditors could file liens on your home and, depending on state law, take some or most of its value. If the child divorces, the house could become an asset that must be divided as part of the marital estate.

Section 2036 of the Internal Revenue Code says that if the parent were to retain a “life interest” in the property, which includes the right to continue living there, the home would remain in her estate rather than be considered a completed gift. However, there are rules for what constitutes a life interest, including the power to determine what happens to the property and liability for its bills.

There are other ways to avoid probate. Many states and DC permit “transfer on death” deeds that let homeowners transfer their homes at death without probate.

Another option is a living trust, which can ensure that all assets avoid probate.

Many states also have simplified probate procedures for smaller estates.

Reference: Considerable (Sep. 18) “Should you transfer your house to your adult kids?”

Can a Power of Attorney Protect My Assets as I Get Older?

Elder law attorneys help protect individuals as they grow older and then protect their beneficiaries when they pass away.

The Street’s recent article entitled “Guide to Protect Your Assets as You Age – Power of Attorneys” asks us to think about visiting your family doctor for the last 30 years but then needing to see a specialist for the first time. That’s because your family doctor isn’t a specialist, and they might miss something. The article explains that elder law attorneys are the specialists of the legal profession—they take a fresh look at a client’s situation and develop strategies to protect them and their families from the risks as we grow older.

Elder law attorneys show you how to protect yourself and your family. When partnering with an elder law attorney, they make certain that your estate goes to your family as you intended, with little or no tax liability.

An important tool for elder law attorneys is the Power of Attorney (POA). There are two of them: a medical POA and a financial POA. These allow you to designate a trusted agent to make your medical and financial decisions, when you are unable.

Unfortunately, the coronavirus pandemic has placed everyone in difficult circumstances. As a result, many hospitalized patients are without the proper estate planning documents. While things are letting up some, hospitals, nursing homes, and assisted living homes have shuttered their doors to visitors and non-essential workers in an attempt to minimize the spread of this disease. As a result, many patients are unable to get these documents signed.

Although some states initially prevented electronic signatures and notarization that would keep contact to a minimum, many have now permitted patients access to elder law and estate planning attorneys, when needed. These states have signed executive orders that allow for electronic signatures, which has been a huge help. Even so, this can be challenging for an elder individual.

Financial powers of attorney are not all the same either. They are just one tool in the toolbox.

A power of attorney can have a list of things you will permit your designated agent to do for you. Many of these documents do not give your agent enough power to protect you. That’s because they limit your agent’s abilities. That may sound good when you first sign them, but the result is that it makes things harder for your family, if you have a stroke and your loved one needs to protect your finances.

Reference: The Street (Sep. 24, 2020) “Guide to Protect Your Assets as You Age – Power of Attorneys”

How Do I Keep My Assets from the Nursing Home?

If you don’t have a plan for your assets when it comes time for nursing home care, they can be at risk. Begin planning now for the expenses of senior living. The first step is to consider the role of Medicaid in paying for nursing home services.

WRCB’s recent article entitled “How to Protect Your Assets from Nursing Homes” describes the way in which Medicaid helps pay for nursing homes and what you can do to shield your assets.

One issue is confusing nursing homes and skilled nursing facilities. Medicare does cover a stay in a skilled nursing facility for convalescence. However, it doesn’t pay for full-time residence in a nursing home. For people who can’t afford to pay and don’t have long-term care insurance, they can apply for Medicaid. That’s a government program that can pay nursing home costs for those with a low income. People who don’t have the savings to pay for nursing home care and then require that level of care, may be able to use Medicaid.

For those who don’t qualify for Medicaid when they need nursing home care, they may become eligible when their savings are depleted. With less money in the bank and minimal income, Medicaid can pay for nursing home care. It is also important to remember that when a Medicaid recipient dies, the government may recoup the benefits provided for nursing home care from the estate. Family members may discover that this will impact their inheritance. To avoid this, look at these ways to protect assets from nursing home expenses.

Give Away Assets. Giving loved ones your assets as gifts can help keep them from being taken by the government when you die. However, there may be tax consequences and could render you Medicaid ineligible.

Create an Irrevocable Trust. When assets are placed in an irrevocable trust, they can no longer belong to you because you name an independent trustee. The only exception is that Medicaid can take assets that were yours five years before you died. Therefore, you need to do this as soon as you know you’re going into a nursing home.

Contact an experienced estate planning, elder law, or Medicaid planning attorney to help you protect your assets. The more you delay, the less likely you’ll be able to protect them.

Reference: WRCB (Dayton) (Sep. 4, 2020) “How to Protect Your Assets from Nursing Homes”

How Do I Find a Great Elder Law Attorney?

Elder law attorneys specialize in legal affairs that uniquely concern seniors and their adult children, says Explosion’s recent article entitled “The Complete Guide on How to Find an Elder Law Attorney.”

Finding the right elder law attorney can be a big task. However, with the right tips, you can find an experienced elder law attorney who is knowledgeable, has the right connections and fits your budget.

While, technically, a general practice attorney will be able to handle your retirement, Medicaid and even your estate planning, an elder law lawyer is deeply entrenched in elder law. This means he or she will have extensive knowledge and experience to handle any case within the scope of elder law, like the following:

  • Retirement planning
  • Long-term care planning and insurance
  • Medicaid
  • Estate planning
  • Social Security
  • Veterans’ benefits; and
  • Other related areas of law.

While a general practice lawyer may be able to help you with one or two of these areas, a competent elder law lawyer knows that there’s no single formula in elder law that applies across the board. That’s why you’ll need a lawyer with a high level of specialization and understanding to handle your specific circumstances. An elder law attorney is best suited for your specific needs.

A referral from someone you trust is a great place to start. When conducting your elder law lawyer search, stay away from attorneys who charge for their services by the hour. For example, if you need an elder law attorney to work on a Medicaid issue, they should be able to give you an estimate of the charges after reviewing your case. That one-time flat fee will cover everything, including any legal costs, phone calls, meetings and court fees.

When it comes to elder law attorneys, nothing says more than experience. An experienced elder law lawyer has handled many cases similar to yours and understands how to proceed. Reviewing the lawyer’s credentials at the state bar website is a great place to start to make sure the lawyer in question is licensed. The website also has information on any previous ethical violations.

In your search for an elder law attorney, look for a good fit and a high level of comfort. Elder law is a complex area of law that requires knowledge and experience.

Reference: Explosion (Aug. 19, 2020) “The Complete Guide on How to Find an Elder Law Attorney”